Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said short-term technical outlook suggested that the FBM KLCI was in a deeply oversold situation and should have had a corrective rally.

“We have expected the index to stage an oversold rebound following a respite on the trade tensions as US President Donald Trump had said the trade spat should hopefully end in ‘three or four weeks’, which restores calm among the investors,“ he told Bernama.

The immediate resistance was spotted at around 1,650 points, followed by 1,700 points, he said.

Nazri Khan said the the current weakness also represented a good buying opportunity for local stocks as there were no signs of slowing down in Malaysian trade volume despite the two-month US-China trade tensions.

“So far, Bursa Malaysia shows a moderate impact from the trade standoff between the US and China, although the unresolved tension could pose a broader economic war.

“The current situation shows that the uncertain market environment has led investors to reduce their investment portfolio,“ he said, adding this was especially so after the US raised tariffs on US$200 billion worth of Chinese goods last week.

He said the banking sector is likely to absorb the immediate impact, as banks need to adjust their deposit and loan rates. “From the fundamental perspective, a temporary draw-down in earnings in the banking industry is likely to happen.”

Despite the weakening ringgit, some sectors are still showing resilient attitude against the bears, which will indirectly lift up investors’ sentiment.

Meanwhile, the commodity sector shows price stability at around US$70 to US$75 per barrel for the crude oil.

“This gives positive impact to countries that produces oil like Malaysia,“ he added.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there seemed to be increasing hope that there would be more stimulus measures from China as a series of high frequencies indicators such as Fixed Asset Investment, Industrial Production and Retail Sales had been moderating in the month of April.

“At the moment, we still believe that equities market will remain cautious and corporate results announced so far are not really forthcoming.

“So, we expect range-bound trade to prevail as markets are watching developments over the trade friction between the US and China,“ Mohd Afzanizam said.

Among the heavyweights, Axiata added 12 sen to RM4.42, Dialog rose 21 sen to RM3.28, Digi went up 13 sen to RM4.70 and Hartalega was 27 sen higher at RM5.26.

Maybank improved five sen to RM9.01 and Top Glove was 19 sen better at RM4.97.